CLEARFIELD – The Clearfield Area School District Board of Directors heard a summary of insurance policies and their premiums that are being considered for renewal during Monday night’s committee meetings.
Renewal premiums for the district’s commercial package for buildings with ACE USA and workers compensation with Highmark increased the most. More specifically renewal premiums for the workers compensation and commercial package increased by $18,839 and $11,182, respectively, according to Sam Maney, business administrator.
As a result, he said the district’s total premium increased from $251,271 for the current-year to a renewal rate of $286,182. However, he said it is still covered from a budget standpoint, as the district has tentatively allocated $298,069 for insurance purposes for 2013-14.
Maney said two factors contributed to the renewal premium increasing to $69,997 for the district’s commercial package with ACE USA. He said the value of its property is up by $6,361,920 and will keep increasing with the renovation of its buildings.
He said the other reason is that at one point its look-back period for claims was only three years and now it is five years. He said in 2010 the district had two water breaks at the Clearfield Area High School, which still haven’t filtered out of its look-back period.
So far as workers compensation, Maney said the district’s claims are coming from two, different directions. While some are facilities-related, he said the district also has people with recurring claims.
According to him, the Pennsylvania School Board Association’s (PSBA) workers compensation quote came in at $204,799. He said PICS declined to quote workers compensation due to the district’s loss history, and Ohio Casualty wasn’t competitive with the PSBA. He said this left Highmark with the lowest renewal premium rate at $170,047.
He said the district had decreased its experience modification factor from 1.532 to 1.44, but it’s based upon a three-year claims average. He said the district’s third oldest year had $120,000 worth of claims still sitting in the calculations while the next two years combined for only $90,000.
Maney said next year the $120,000 will drop off, and the district wants to get its claims under control. He said Highmark would like to conduct a walk-through of the Clearfield Middle School, the building where most of the district’s claims originate from.
He said the district is aware of numerous issues that exist at the CMS and has been upfront about not wanting to invest a lot in the building. He said Highmark still would like to come up with suggestions to reduce the number of claims at the CMS.
“There are credits that they can apply to our rate to bring it down, but our loss history is such that the underwriter chose not to give it to us,” said Maney. “And, to be honest, I wouldn’t have either based upon 13 claims per year. We’re a risk until we get that under control.”
The other renewal premiums being considered are: $9,090 for Business Auto with ACE USA; $11,062 for Excess Liability with Old Republic; $15,421 for School Leaders Legal Liability with Old Republic; and $10,565 for Security & Privacy Liability with Underwriters at Lloyds.
Maney asked board members to contact him with questions this week. He will report any answers at next week’s regular meeting.